Human T-cell leukemia virus type I (HTLV-I) is a member of the retrovirus subgroup that also includes bovine leukemia virus (BLV), human T-cell leukemia virus type II (HTLV-II), and simian T-cell leukemia virus (STLV). The viruses in this group encode regulatory proteins, termed Tax and Rex, that control virus transcription initiation and mRNA accumulation, respectively. In addition, several potential genes are present whose function and expression are not yet known. The Rex protein is predicted to bind sequence elements at the 3' end of the viral RNA and influence nuclear to cytoplasmic transport of specific transcripts. To better understand the molecular basis of Rex action, HTLV-I and BLV proviruses, Rex-deficient proviral mutants, and Rex expression, plasmids were constructed. The partially purified HTLV-I Rex protein, expressed in bacteria, was shown to bind specifically to a structured RNA element in vitro. RNAs containing the Rex-response element of HTLV-I or the Rev- response element of HIV-1 were bound by HTLV-I Rex, whereas RNAs containing the anti-sense orientations of these elements were not. We have analyzed the transcription pattern of HTLV-I using the highly sensitive method of cDNA-PCR. Low abundance mRNA species generated using alternative splice sites were identified and characterized. Two mRNAs encoding open reading frames preceding the tax/rex genes were detected in transfected and infected cells. Analogous mRNAs were found in HTLV-II- and BLV-infected cells. Finally, examination of the mRNAs and proteins expressed from defective HTLV-I proviruses indicated that alternatively spliced mRNAs were produced.